Departing Novartis CEO Sets His Eyes On Silicon Valley

Matthew Herper
,
Forbes Staff
I cover science and medicine, and believe this is biology's century.

Novartis

Novartis CEO Joseph Jimenez is excited by the tech world.

The biggest surprise about Novartis Chief Executive Joe Jimenez’s departure on Monday was buried in the quote in the company’s press release where he talked about spending more time with his family. His family, he said, is “ready to return to Silicon Valley.”

With that simple clause, Jimenez, 57, indicated that he is looking for a second act – and gave a picture of what he thought that second act will be after running the Basel, Switzerland-based drugmaker.

“When I think of what really excites me, it’s where biology comes together with technology, like when you think about what’s happening right now in the Valley in California,” Jimenez said when I caught up with him by phone. He says he’s not ruling out another big company, but is fascinated by more entrepreneurial startups, and sees an opportunity for those who understand healthcare to bridge the gap between brilliant techies and a broken system.

“The thing that needs to be fixed is the inefficiency in the U.S. healthcare system. This is a system that is going to implode based on the burden of disease, for instance, Alzheimer’s disease. How are we going to pay for the innovation that’s coming?” Jimenez asks. His answer: “The only way is to get rid of the inefficiency in the system. That’s where I see digital technology starting to have a significant impact.”

He got a glimpse of this potential, he says, from Novartis’s efforts with Verily, the life sciences arm of Alphabet (formerly Google). The companies have been working on a contact lens that can monitor the sugar levels of diabetics through their tears. Jimenez says there is a prototype, and that it showed him that engineering could benefit from healthcare knowhow.

Jimenez came to Novartis from consumer goods (he’d been an executive at H.J. Heinz, the ketchup maker), after serving on the board of London’s AstraZeneca. He beat out the company’s then head of R&D, Joerg Reinhardt, who departed for Bayer, for the top job. (Reinhardt would later return to Novartis, as chairman, a role he still has.) Jimenez’s predecessor, Daniel Vasella, had built Novartis into a global powerhouse. But Jimenez was left to deal with a lot of the managerial challenges that were left over: manufacturing problems; when the eye care division, Alcon, that Vasella had bought failed to perform; and the patent expirations of the companies two biggest sellers, Diovan for hypertension and Gleevec for leukemia.

Things are looking up. The patent expirations are over. Entresto, a drug for heart failure that floundered, seems to finally be picking up steam. Last week, Novartis received marketing approval from the Food and Drug Administration for Kymriah, a treatment that re-engineers patients own T-cells to fight a type of pediatric leukemia. Novartis announced the treatment would cost $475,000 per patient, but only for those who had less cancer after a month. This type of “outcomes-based” pricing model had been one Jimenez had been musing about for years. But he says he has no regrets about leaving it in other people’s hands. “Outcomes-based pricing is the way that we’re going to at least improve the efficiency of the system for the pharmaceutical business,” he says. “I’m proud of the fact that there’s now momentum in the company, and I think it’s on its way regardless of whether I’m here.”